Forex Day Trading Strategy: Simple Strategy for Rapid Profit

15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

A really simple Forex day trading strategy can be one of the most rewarding weapons to have in your trader arsenal. There are many other ways to day-trade Forex, so donโ€™t think this strategy is the only way.

We like to make things simple. That is why we created the best simple Forex Day Trading strategy, as it will be great for beginners.

We have many articles on day trading, and if you want to get into the basics, our day trading for beginnersย article would be a great start!

Additionally, You may want to start with Forex Trading For Beginners if you are unfamiliar with Forex trading altogether.

Before we get into the Simple Forex Day Trading Strategy, letโ€™s first answer some frequently asked questions about Forex Day Trading.

Simple Forex Day Trading Strategy FAQs

What is Day-Trading Forex?ย 

Day trading Forex is when you buy and sell on the same day.
For example, if we were to buy EUR/USD this morning at 8 A.M. and then sell it at 2 PM, that is considered a day trade.

How much do Forex day traders make?

Forex day traders can make anywhere from 1-5% of the total account each day. Sometimes more, but that requires a lot of risk. Risking too much can crush your account. We have a great article on risk you can find here if you want to find the best risk management strategy.

What is the best strategy for Forex day trading?

The best strategy is the one that fits you best and makes you money! It sounds a little obvious, but two traders could be trading the same Forex strategy and have completely different results. It is all about the risk, and keeping your emotions in check. Donโ€™t be afraid to take a loss!

Is Forex Day trading like gambling?

Many will say that trying to day-trade is comparable to gambling. In a way, you are taking a bet that a particular pair will go up, but I hate the word โ€œgambling.โ€ Get a trading plan together and never trade based on emotions. Leave that to the gamblers!

Can Forex day trading make you rich?

The best simple forex strategy can be highly rewarding. If you follow a system that has a great risk to reward and risk management, there is no reason you cannot do well. Using a prop trading firm is also a great way to day-trade Forex because you can trade with a much larger account than usual. We do fund Forex traders. All of our Forex Master Traders get access to our prop firm, so if that is something you are interested in, you can check that out here!

Are there any Prop live forex trading rooms?

Yes, we do a FX live trading room. Our forex day trading system focuses a lot on price action. Our Forex master trader coaches will show you exactly how we trade the markets every day. In addition, our prop lives forex trading rooms feature our prop traders, trading every day. If you would like to see live Forex trading room reviews, you can see them here. This is not a free live trading room. We do charge a small monthly fee but, to us, this is completely worth it because of the value you get on a daily basis. In our eyes, this is the best forex trading room available right now.

Is Forex Day trading risky?

Yes. Trading is risky, in general. Nothing is a guarantee. All you can do is find a system that works for you and follow it. Tweaking is always necessary, as no one has a true โ€œholy grailโ€ trading strategy.

Is Forex better than stocks?

The Forex market is way faster than stocks. Most stocks typically donโ€™t move all that much in a given day. Like stocks, Forex is highly affected by the news. You are also leveraging a lot more with Forex. If you are unsure what leveraging is, babypips has a great article on this topicย 

Best Simple Forex Strategy Prerequisites

Trading tools needed for this day trading Forex strategy.

Forex Trading Platforms:ย 

  • (Recommended) Meta trader 4.

You can also try another platform like Tradingview, or NinjaTrader, but we always prefer Meta trader for Forex trading.

Indicators Needed:ย 

  • 9 Exponential Moving Average (EMA)
  • 20 Exponential Moving Average (EMA)
  • M30 Time Frame

Best currency pairs for day trading: The Best Simple Forex Strategy

We recommend you stick with the 7 major currency pairs which are:

  • EUR/USD
  • USD/JPY
  • GBP/USD
  • USD/CHF
  • AUD/USD
  • USD/CAD
  • NZD/USD

In our example, we are using Meta Trader 4 which is the #1 trading platform for Forex traders. We also will be using the EURUSD as an example which is one of the most popular Forex pairs to day trade.ย  We breakdown the best forex strategy with 6 simple rules.ย 

Remember, we like to keep it simple, so it is easy to follow. Also, note that this strategy will work on any time frame you prefer to trade it with.

Forex Day Trading Rules โ€” Best Simple Forex Strategy

Simple Forex Day Trading Strategy

Forex Day Trading Rules โ€” Best Simple Forex Strategy

1 Day or less 1 day

Setup your chart

Best Indicator For Day Trading Forex

Go to the M30 time frame, then add the 9EMA and 20EMA to the chart, which should be simple enough. In Meta Trader, you can find the EMA under Navigator/Indicators/Moving Average. Once you select the Moving Average, change the MA method to exponential and the period to 9. Repeat and add the 20 EMA to the chart.

Search For Downward Trending Currency Pairs

Forex Day Trading Strategy Trending Down

In this example, we are going to use EURUSD. Notice how it is trending down? This is what you should be looking for. It should be hitting lower lows (or higher highs for a sell example).ย  In our case, we got the EUR USD trending down. The goal with this strategy now will be to find a break of this trend to the upside. So we will attempt to find a place to buy it because we think this pair will go up.

Draw A Trend Line

Forex Day Trading Strategy: Simple Strategy For Rapid Profit

Trend lines are great! If you need help drawing trend lines, feel free to look at this article, we went in-depth on how to draw them. For a downtrend like this, you want to draw an upper trend line, as you see above. We are looking for the price to come up and break it.

Entry

Forex Day Trading Strategy: Simple Strategy For Rapid Profit

Enter the BUY trade when a candle closes above both 9 and 20 EMA after the trend line break. This part is critical. Since this is an example of a buy trade, the candle must close above both the 9 EMA and the 20 EMA. This is the candle you could take the buy trade. Remember, these are 30-minute candles. We recommend you wait for the previous candle to close before you enter so that it does not close above the moving averages.

Stop Loss

Forex Day Trading Strategy Stop Loss

We always recommend you have a Stop loss with any trade you take. Especially in these lower time frames, as prices can move rapidly. To place your stop loss, place it below both of the moving averages. This will give it a little room to move after entry.

Take Profit Target

Simple Forex Day Trading Strategy Take Profit

Ideally, you always want to hit a 2:1 Risk to reward ratio, or close to it.
Meaning, if your stop loss is at 20 pips, you should have a 40-pip target.
When the price levels out and continues to touch the bottom 20 EMA, take profit then. This most likely means a pullback is coming, and we donโ€™t want to deal with any pullbacks. That is it!

Tools:

  • MetaTrader
  • 9EMA
  • 20EMA

If you try this strategy out, do so on a demo account and if you get any results let us know below in the comments!

Because this Day trading Forex strategy can be both a sell and a buying strategy, I want to share an example of a sell setup.

Day Trading Forex Short Example

See the image below for an example to see how this strategy would play out in a short setup:

Forex Day Trading Strategy Short Example
Sell example day trading 1

When not to use this simple Forex day trading strategy.

We recommend you keep an eye on the big news for that day. If there is a news announcement, the market can get crazy, fast. So it is important that you avoid a sudden news spike. You can simply reference this as it will show you all the daily news that will impact certain currencies.

Day Trading Forex vs Stocksย 

The advantage of day trading Forex is that you will not be marked as a pattern day trader. Also, the markets are a lot more volatile in Forex, so you can capture a big move quickly.

Forex Day Trading Strategy Video

Conclusion โ€” Forex Day Trading Strategy

Our Simple Forex Day Trading Strategy is quick and could be highly rewarding with the right system! This Forex system is just one of many ways you can do this.

There are thousands of strategies out there that can make you profitable, it is your job to follow the rules and see if it works for you.

This works great with trending pairs that are slowly losing steam. In the two EUR/USD day trading examples above, that is exactly what happened.

You were in and out of the trades in one day.

If you liked this Simple Day Trading Forex strategy, please leave a comment below!

Thanks for reading.

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15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

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